Obesity remains a serious health problem and it is no secret that many people want to lose weight. Behavioral economists typically argue that “nudges” help individuals with various decisionmaking flaws to live longer, healthier, and better lives. In an article in the new issue of Regulation, Michael L. Marlow discusses how nudging by government differs from nudging by markets, and explains why market nudging is the more promising avenue for helping citizens to lose weight.

Armed with a computer model in 1935, one could probably have written the exact same story on California drought as appears today in the Washington Post some 80 years ago, prompted by the very similar outlier temperatures of 1934 and 2014.

Two long wars, chronic deficits, the financial crisis, the costly drug war, the growth of executive power under Presidents Bush and Obama, and the revelations about NSA abuses, have given rise to a growing libertarian movement in our country – with a greater focus on individual liberty and less government power. David Boaz’s newly released The Libertarian Mind is a comprehensive guide to the history, philosophy, and growth of the libertarian movement, with incisive analyses of today’s most pressing issues and policies.

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Tag: bureaucracy

If you needed more proof that bureaucracy induces the sacrifice of common sense to rigid rules, there’s this forehead-slapping story from the Washington Post’s Petula Dvorak:

Avery Gagliano is a commanding young pianist who attacks Chopin with the focused diligence of a master craftsman and the grace of a ballet dancer.

The prodigy, who just turned 13, was one of 12 musicians selected from across the globe to play at a prestigious event in Munich last year and has won competitions and headlined with orchestras nationwide.

One would expect that she’d be the pride of her school. Unfortunately, little Miss Avery attended a government-run school in Washington D.C.

But to the D.C. public school system, the eighth-grader from Mount Pleasant is also a truant. Yes, you read that right. Avery’s amazing talent and straight-A grades at Alice Deal Middle School earned her no slack from school officials, despite her parents begging and pleading for an exception.

“As I shared during our phone conversation this morning, DCPS is unable to excuse Avery’s absences due to her piano travels, performances, rehearsals, etc.,” Jemea Goso, attendance specialist with the school system’s Office of Youth Engagement, wrote in an e-mail to Avery’s parents, Drew Gagliano and Ying Lam, last year before she left to perform in Munich.

Although administrators at Deal were supportive of Avery’s budding career and her new role as an ambassador for an international music foundation, the question of whether her absences violated the District’s truancy rules and law had to be kicked up to the main office. And despite requests, no one from the school system wanted to go on the record explaining its refusal to consider her performance-related absences as excused instead of unexcused.

A year ago I wrote: “It’s rare for a regulated company to mount open and disrespectful resistance to a federal regulatory agency, but that’s what the maker of BuckyBalls, the popular desktop magnetic toy, is doing in response to the Consumer Product Safety Commission’s effort to ban its product.” The maker in question had devised cheeky, sarcastic ads asking why other products with injurious potential (coconuts, hot dogs) weren’t banned on the CPSC’s logic.

One reason it’s rare to mount open and disrespectful resistance to a federal agency is that agencies have so many ways to make businesspeople’s lives unhappy. This spring, breaking new legal ground, the CPSC reached out and named CEO Craig Zucker personally as a respondent in its recall proceeding. According to a Gibson Dunn commentary,

For the first time, the CPSC is pursuing individual and personal liability against an executive for a company’s alleged violations of the Consumer Product Safety Act. Although it remains to be seen whether the CPSC will adopt this approach in other cases, at minimum, this demonstrates just how far the CPSC is willing to push the envelope.

It’s just the latest example, the law firm says, of a pattern in which “the CPSC has aggressively enforced its governing statute and regulations, repeatedly pushing the limits of its expanded authority.” If the move succeeds, Zucker could be ordered to foot the bill personally for offering consumers full refunds for all products sold, reimbursing retailers for recall costs, and various other expenses potentially reaching into the millions.

I’ve repeatedly explained that Keynesian economics doesn’t work because any money the government spends must first be diverted from the productive sector of the economy, which means either higher taxes or more red ink. So unless one actually thinks that politicians spend money with high levels of effectiveness and efficiency, this certainly suggests that growth will be stronger when the burden of government spending is modest (and if spending is concentrated on “public goods,” which can have a positive “rate of return” for the economy).

But I never would have thought that there were people at the IMF who would be publicly willing to express the same beliefs. Yet that’s exactly what two economists found in a new study. Here are some key passages from the abstract:

We quantify the extent to which public-sector employment crowds out private-sector employment using specially assembled datasets for a large cross-section of developing and advanced countries… Regressions of either private-sector employment rates or unemployment rates on two measures of public-sector employment point to full crowding out. This means that high rates of public employment, which incur substantial fiscal costs, have a large negative impact on private employment rates and do not reduce overall unemployment rates.

So even an international bureaucracy now acknowledges that bureaucrats “incur substantial fiscal costs” and “have a large negative impact on private employment.”

Well knock me over with a feather!

Next thing you know, one of these bureaucracies will tell us that government spending, in general, undermines prosperity. Hold on, the European Central Bank and World Bank already have produced such research. And the Organization for Economic Cooperation and Development has even explained how welfare spending hurts growth by reducing work incentives.

To be sure, these are the results of research by staff economists, whom the political appointees at these bureaucracies routinely ignore. Nonetheless, it’s good to know that there’s powerful evidence for smaller government, just in case we ever find some politicians who actually want to do the right thing.

I’ve complained endlessly about America’s bloated and expensive government bureaucracies. It irks me that people in the productive sector get slammed with ever-higher taxes in part to support a gilded class of paper pushers who have climbed on the gravy train of public sector employment.

To see where bureaucrats are most overpaid, look at the nations (particularly Greece, but also Portugal and Spain) where overall pay is a very large burden but bureaucrats are not a big share of the workforce.

To see where the trends are most worrisome, look at the changes over time. The total cost of bureaucracy, for instance, jumped considerably between 2000 and 2009 in Ireland, Greece, the United Kingdom, Denmark, Spain, and the United States. So much for “austerity.”

P.S. These numbers are only for OECD nations, so it’s quite possible that other jurisdictions are worse. To cite just one example, I was one of the researchers for the Miller-Shaw Commission, which discovered several years ago that fiscal problems in the Cayman Islands are almost entirely a function of too many bureaucrats with too much compensation.

P.P.S. Here’s my video on the cost of bureaucracy in the United States.

The Internal Revenue Service inappropriately flagged conservative political groups for additional reviews during the 2012 election to see if they were violating their tax-exempt status, a top IRS official said Friday. Organizations were singled out because they included the words “tea party” or “patriot” in their applications for tax-exempt status, said Lois Lerner, who heads the IRS division that oversees tax-exempt groups.

The 61-page online Obamacare draft application for health care includes asking if the applicant wants to register to vote, raising the specter that pro-Obama groups being tapped to help Americans sign up for the program will also steer them to register with the Democratic Party.

That may strike some as unseemly. After all, people go to jail for buying votes. But the real problem here is that ObamaCare is paying too much.

The price of one bona fide, registered American vote varies from place to place. But it is rarely more than a tank of gas.

Indeed, as a rising furor over voter fraud has prodded some states to mount extensive efforts against illegal voters, election-fraud cases more often involve citizens who sell their votes, usually remarkably cheaply. In West Virginia over the past decade, the cost was as low as $10. Last year in West Memphis, Ark., a statehouse candidate used $2 half-pints of vodka.

At the high end, corrupt candidates in Clay County, Ky., once paid $100. But that was probably too much: It attracted one woman who already had sold her vote. The man who bought it first was outraged, and he beat up the man who bought it second.

The Washington Timesnoted this week that the 2012 improper payment rate for unemployment insurance benefits was 11.4 percent ($10.3 billion out of $90.2 billion), according to U.S. Department of Labor data. The good news is that the figure is down from 12 percent in 2011. The bad news is that it’s still a pathetic waste of money.

When policymakers dream of ways to provide subsidies and safety nets to groups in society, they rarely take into account the large bureaucratic costs that are inevitably involved. The UI system is a complex and costly system for governments and businesses to administer.

State governments must raise taxes from almost 8 million businesses, with tax bills specifically calculated for each firm’s experience rating. At the same time, the states dole out individually calculated benefits to millions of workers and monitor whether each person making a claim is currently eligible. Businesses and states need to adjudicate the many disputed claims for benefits, and states need to police UI tax evasion as businesses try to manipulate the system to get a lower tax rate.

Federal and state UI administration cost taxpayers $5.9 billion in 2010. Despite this large cost, there is widespread concern among experts that the UI system is “in long-term decline” from an administrative perspective. UI computer systems are apparently far outdated in many states, and administrators say that they need more money to do their jobs competently.